We’ve finally had the time to digest the Q3 prints – for which we provide our observations and lessons learned. We also answer the question: “How can I make money from now until year-end?” as well as provide investor feedback now that we are through the last earnings cycle of 2019. Our note has a lot of cool charts – such as how each company did relative to Consensus expectations for Q3, and where Consensus estimates have gone up and gone down for both 2019 and 2020.
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This is going to be short and sheet as we now say……given we had 18 companies report and my wrist hurts.
Dave and Victoria sound super-pumped about 2020 with 85% of retransmission consent subs being renewed AND RE-PRICED (Dave emphasized this); a big political year (no official guidance just yet); and Premion finally re-gaining momentum (we haven’t heard Premion mentioned for a few quarters now so clearly the trends there are good).
At first glance, Q3 revenue was slightly ahead – retrans was in line (important!), while EBITDA beat us by 3% and the Street by 4%. So we would call this a nice print.
Here is what we’ve been hearing this long insane week – which is going to be followed by another one of what I will call “WORST WEEKS EVER.” Yep – you guessed it. Media earnings time. Thankfully though, Hans (CBS) and Franz (VIAB) are reporting the week after….
We already updated our NXST, SSP, SBGI, and TGNA estimates in separate notes the past couple of weeks (NXST, SSP, and TGNA were on 10/15, while SBGI was on 10/29). So, in this note, we’re playing a little bit of catch up with the other two broadcasters – specifically reducing Q4 sub estimates for GTN and MDP – all related to AT&T. We also summarize our expectations for all our Local coverage going into the Q3 print.
Our primer on the Local TV industry.
Wolfe Research Senior Media & Distribution Analyst, Marci Ryvicker, hosted a webcast to discuss updated estimates for recent deals, retrans trends, core trends, what we think happens with TGNA, what will move NXST's stock, and feedback from our Broadcast call.
The hottest names this week were ATUS (369 bps better than the S&P), NFLX (310 bps), CHTR (355 bps), GTN (354 bps), and SBGI (306 bps).
In this note, we remind you of the 4 transactions that TGNA closed this year as well as update our estimates. Specifically, we raise our as-reported 2019 rev./EBITDA by 5% each and 2020 rev./EBITDA by 17%/16%. We also raise our 2019/2020 blended FCF/share to $2.17 from $1.93. (We caveat that our new estimates include a lower sub number in Q4 related to T – we are incorporating this across the board as we update models). In general, we are 3-10% higher in revenue and EBITDA compared to Consensus, which we caveat is not completely updated for the recent transactions.
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